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Because learning changes everything. ® Week 1 (PPT1) CHAPTER 1 The Exceptional Manager What You Do, How You Do It © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 1-1 1-2 1-3 1-4 1-5 1-6 1-7 Identify the rewards of being an exceptional manager. List the four principle functions of a manager. Describe the levels and areas of management. Identify the roles an effective manager must play. Discuss the skills of an outstanding manager. Identify the seven challenges faced by most managers. Define the core competencies, knowledge, soft skills, attitudes, and other characteristics needed for career readiness and discuss how they can be developed. 1-8 Describe the process for managing your career readiness. © McGraw Hill USING MANAGEMENT SKILLS FOR COLLEGE SUCCESS 1. Functions of management. 2. Applying the functions of management to school projects. 3. Applying the functions of management in your personal life. © McGraw Hill MANAGEMENT: WHAT IT IS, WHAT ITS BENEFITS ARE The Rise of a Leader Key to Career Growth: “Doing Things I’ve Never Done Before” The Art of Management Defined Why Organizations Value Managers: The Multiplier Effect What Are the Rewards of Studying and Practicing Management? © McGraw Hill THE RISE OF A LEADER General Motors CEO Mary Barra © McGraw Hill Mark Lennihan/AP Images KEY TO CAREER GROWTH: “DOING THINGS I’VE NEVER DONE BEFORE” Jeff Bezos, founder of Amazon, left Wall Street to start Amazon from his basement. © McGraw Hill THE ART OF MANAGEMENT DEFINED • • • • © McGraw Hill Being an exceptional manager is an art that can be learned. Management is the art of getting things done through people. Managers are task-oriented, achievementoriented, and people-oriented. Good managers are concerned with trying to achieve both efficiency and effectiveness. WHY ORGANIZATIONS VALUE MANAGERS: THE MULTIPLIER EFFECT Good managers create value. © McGraw Hill As a manager you have a multiplier effect: Your influence on the organization is multiplied far beyond the results that can be achieved by just one person acting alone. WHAT ARE THE REWARDS OF STUDYING MANAGEMENT? The rewards of studying management include: • You will have an insider’s understanding of how to deal with organizations from the outside. • You will know from experience how to relate to your supervisors. • You will better interact with co-workers. • You will be able to manage yourself and your career. • You might make more money during your career. © McGraw Hill WHAT ARE THE REWARDS OF PRACTICING MANAGEMENT? The rewards of practicing management include: • You and your employees can experience a sense of accomplishment. • You can stretch your abilities and magnify your range. • You can build a catalog of successful products or services. © McGraw Hill WHAT MANAGERS DO: THE FOUR PRINCIPAL FUNCTIONS • Planning: Discussed in Part 3 • Organizing: Discussed in Part 4 • Leading: Discussed in Part 5 • Controlling: Discussed in Part 6 © McGraw Hill THE MANAGEMENT PROCESS Figure 1.1: The Management Process Access the text alternative for these images. © McGraw Hill PYRAMID POWER: LEVELS OF AND AREAS OF MANAGEMENT • The Traditional Management Pyramid: Levels and Areas • Four Levels of Management • Areas of Management: Functional Managers versus General Managers • Managers for Three Types of Organizations: For-Profit, Nonprofit, Mutual-Benefit • Different Organizations, Different Management? © McGraw Hill THE TRADITIONAL MANAGEMENT PYRAMID: LEVELS AND AREAS Figure 1.2 © McGraw Hill FOUR LEVELS OF MANAGEMENT • Top managers make long-term decisions. • Middle managers implement the policies and plans of the top managers above them. • First-line managers make short-term operating decisions. • Team leader is responsible for facilitating team activities. • Nonmanagerial employees either work alone on tasks or with others on a variety of teams. © McGraw Hill AREAS OF MANAGEMENT: FUNCTIONAL MANAGERS VERSUS GENERAL MANAGERS • Functional managers are responsible for just one organizational activity. • General managers are responsible for several organizational activities. © McGraw Hill D Dipasupil/Getty Image MANAGERS FOR THREE TYPES OF ORGANIZATIONS For-profit organizations Nonprofit organizations Mutual-benefit organizations © McGraw Hill DIFFERENT ORGANIZATIONS, DIFFERENT MANAGEMENT? Generally you would be performing the four management functions of planning, organizing, leading, and controlling, regardless of the type of organization. The measures of success is the single biggest difference. © McGraw Hill ROLES MANAGERS MUST PLAY SUCCESSFULLY The Manager’s Roles: How Do Managers Spend Their Time? © McGraw Hill Three Types of Managerial Roles: • Interpersonal • Informational • Decisional THE MANAGER’S ROLES: HOW DO MANAGERS SPEND THEIR TIME? • Managers are always working, and they are in constant demand. • Managers spend virtually all of their work time communicating with others. • Managers must be purposeful and proactive about managing their time. © McGraw Hill THREE TYPES OF MANAGERIAL ROLES: INTERPERSONAL, INFORMATIONAL, AND DECISIONAL Interpersonal roles: • Figurehead, Leader, and Liaison Informational roles: • Monitor, Disseminator, and Spokesperson Decisional roles: • © McGraw Hill Entrepreneur, Disturbance Handler, Resource Allocator, and Negotiator THE SKILLS EXCEPTIONAL MANAGERS NEED Technical Skills: • The ability to perform a specific job Conceptual Skills: • The ability to think analytically Human Skills: • “Soft Skills,” the ability to interact well with people © McGraw Hill And additional valued traits in managers. TECHNICAL SKILLS Having the requisite technical skills seems to be most important at the lower levels of management—that is, among employees in their first professional job and first-line managers. © McGraw Hill CONCEPTUAL SKILLS Conceptual skills are more important as you move up the management ladder, particularly for top managers, who must deal with problems that are ambiguous but that could have far-reaching consequences. © McGraw Hill HUMAN SKILLS The most difficult set of skills to master but which are especially important with people in teams, an important part of today’s organizations. © McGraw Hill THE MOST VALUABLE TRAITS IN MANAGERS Among the chief skills companies seek in top managers are the following: • The ability to motivate and engage others • The ability to communicate • Work experience outside the United States • High energy levels to meet the demands of global travel and a 24/7 world © McGraw Hill SEVEN CHALLENGES TO BEING AN EXCEPTIONAL MANAGER Challenge #1: • Managing for Competitive Advantage—Staying Ahead of Rivals Challenge #2: • Managing for Technological Advances—Dealing with the “New Normal” Challenge #3: • Managing for Inclusion and Diversity—The Future Won’t Resemble the Past Challenge #4: • Managing for Globalization—The Expanding Management Universe Challenge #5: • Managing for Ethical Standards Challenge #6: • Managing for Sustainable Development—The Business of Green Challenge #7: • Managing for Happiness and Meaningfulness © McGraw Hill CHALLENGE #1: MANAGING FOR COMPETITIVE ADVANTAGE— STAYING AHEAD OF RIVALS Organizations must stay ahead in four areas • Being responsive to customers • Innovation • Quality • Efficiency © McGraw Hill CHALLENGE #2: MANAGING FOR TECHNOLOGICAL ADVANCES–DEALING WITH THE NEW NORMAL • • • • • • © McGraw Hill Ecommerce Far-ranging electronic management all of the time. Data, data, and more data: a challenge to decision making The rise of artificial intelligence: more automation in the workforce Organizational changes: shifts in structure, jobs, goals, and management Knowledge management and collaborative computing CHALLENGE #3: MANAGING FOR INCLUSION AND DIVERSITY—THE FUTURE WON’T RESEMBLE THE PAST • In the coming years there will be a different mix of women, immigrants, and older people in the general population, as well as in the workforce. • Some scholars think that diversity and variety in staffing produce organizational strength. • Clearly, however, the challenge to the manager of the near future is to maximize the contributions of employees diverse in gender, age, race, ethnicity, and sexual orientation. © McGraw Hill CHALLENGE #4: MANAGING FOR GLOBALIZATION—THE EXPANDING MANAGEMENT UNIVERSE • Verbal expressions and gestures don’t mean the same thing to everyone around the world. • Failure to understand cultural differences can affect organizations’ ability to manage globally. • Globalization is the increasingly interconnected nature of business around the world. • Managing for globalization will be a complex, ongoing challenge. © McGraw Hill CHALLENGE #5: MANAGING FOR ETHICAL STANDARDS • Recent incidents point to serious repercussions when people fail to realize that ethical standards must be followed in every area of life. • Ethical lapses have the potential to do great harm, and not only financial harm. © McGraw Hill CHALLENGE #6: MANAGING FOR SUSTAINABLE DEVELOPMENT—THE BUSINESS OF GREEN • Our economic system has brought prosperity but in doing so has often assumed an unlimited supply of natural resources. • We now believe some of the actions and decisions of the past have caused irreversible damage to the environment. • The United Nations addressed these issues by adopting a set of 17 Sustainable Development Goals. • Clearly sustainable development is a critical issue facing businesses today. © McGraw Hill CHALLENGE #7: MANAGING FOR HAPPINESS AND MEANINGFULNESS • Research shows that a sense of meaningfulness in your life is associated with better health, work and life satisfaction, and performance. Build meaning into your life by: • • Identifying activities you love doing • Finding a way to build your natural strengths into your personal and work life • Going out and helping someone © McGraw Hill BUILDING YOUR CAREER READINESS Figure 1.3 Sources: National Association of Colleges and Employers, “Are College Graduates ‘Career Ready’?” February 19, 2018, https://www.naceweb.org/career-readiness/competencies/are-college-graduates-career-ready/. Data derived from NACE’s “Job Outlook 2018” and “The Class of 2017 Student Survey Report.” Access text description for images. © McGraw Hill FIGURE 1.4 MODEL OF CAREER READINESS Access text description for images. © McGraw Hill DEVELOPING CAREER READINESS • Build self-awareness. • Learn from educational activities. • Model others possessing the targeted competencies. • Learn from on-the-job activities. • Seek experience from student groups and organizations. • Experiment. © McGraw Hill MANAGING YOUR CAREER READINESS Three keys to success. 1. It’s your responsibility to manage your career. Don’t count on others. 2. Personal reflection, motivation, commitment, and experimentation are essential. 3. Success is achieved by following a process. © McGraw Hill STEPS FOR DEVELOPING CAREER READINESS STEP 1: • Examine the list of career readiness competencies and pick two or three that impact your current performance. STEP 2: • Consider how you can use material from the text to develop your targeted career readiness competencies. STEP 3: • Experiment with small steps aimed at developing your targeted career readiness competencies. STEP 4: • © McGraw Hill Evaluate what happened during your small-step experiments. A PROCESS FOR DEVELOPING CAREER READINESS Figure 1.5 Process for managing career readiness. Kinicki and Associates, Inc. 2022 Access text descriptions for images. © McGraw Hill MAKE IT A HABIT A simple way to approach the task of managing your career readiness: Make it a habit. © McGraw Hill • Identify something specific you want to accomplish. • Identify a simple, tiny change you can implement. End of Main Content Because learning changes everything. www.mheducation.com © 2020 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 2 (PPT2A) CHAPTER 2 MANAGEMENT THEORY Essential Background for the Successful Manager © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 2-1 Describe the development of current perspectives on management. 2-2 Discuss the insights of the classical view of management. 2-3 Describe the principles of the behavioral view of management. 2-4 Discuss the two quantitative approaches to solving problems. 2-5 Identify takeaways from the systems view of management. 2-6 Explain why there is no one best way to manage in all situations. 2-7 Define how managers foster a learning organization, highperformance work practices, and shared value and sustainable development. 2-8 Describe how to develop the career readiness competency of understanding the business. © McGraw Hill MANAGE YOU: WHAT TYPE OF WORK ENVIRONMENT DO I PREFER? • What Does It Mean for You? • How Can You Get a Job in a Peopled Organization? © McGraw Hill EVOLVING VIEWPOINTS: HOW WE GOT TO TODAY’S MANAGEMENT OUTLOOK Creating Modern Management: The Handbook of Peter Drucker Six Practical Reasons for Studying This Chapter The Progression of Management Perspectives © McGraw Hill CREATING MODERN MANAGEMENT: THE HANDBOOK OF PETER DRUCKER. Understanding management history can assist you in determining the type of management style you prefer. Drucker introduced several ideas that now underlie the organization and practice of management. • Workers should be treated as assets. • The corporation could be considered a human community. • There is “no business without a customer.” • Institutionalized management practices are preferable to charismatic cult leaders. © McGraw Hill Jonathan Alcorn/ZUMAPRESS/ Newscom SIX PRACTICAL REASONS FOR STUDYING THIS CHAPTER 1. Understanding of the present 2. Guide to action 3. Source of new ideas 4. Clues to the meaning of your managers’ decisions 5. Clues to the meaning of outside events 6. Producing positive results © McGraw Hill FIGURE 2.1 PROGRESSION OF MANAGEMENT PERSPECTIVES Access the text alternative for slide images. © McGraw Hill CLASSICAL VIEWPOINT: SCIENTIFIC AND ADMINISTRATIVE MANAGEMENT • Scientific Management: Pioneered by Taylor and the Gilbreths • Administrative Management: Pioneered by Spaulding, Fayol, and Weber • The Problem with the Classical Viewpoint: Too Mechanistic © McGraw Hill Bettmann/Getty Images SCIENTIFIC MANAGEMENT: PIONEERED BY TAYLOR AND THE GILBRETHS Frederick Taylor and the Four Principles of Scientific Management: © McGraw Hill • Evaluate a task by scientifically studying each part of it. • Carefully select workers with the right abilities for the task. • Give workers the training and incentives to do the task with the proper work methods. • Use scientific principles to plan the work methods and ease the way for workers to do their jobs. SCIENTIFIC MANAGEMENT: PIONEERED BY TAYLOR AND THE GILBRETHS • • • • © McGraw Hill Frank and Lillian Gilbreth and Industrial Engineering. Identified 17 basic motions and applied them to work processes to determine whether the tasks could be done more efficiently. Demonstrated they could eliminate motions while reducing fatigue for some workers. The Gilbreths are important because they reinforced the link between studying the physical movements in a job and workers’ efficiency. Bettmann/Getty Images ADMINISTRATIVE MANAGEMENT: PIONEERED BY SPAULDING, FAYOL, AND WEBER 1 Charles Clinton Spaulding: the “Father of African-American Management” Suggested considerations such as: • • • • • • © McGraw Hill The need for authority Division of labor Adequate capital Proper budgeting Cooperation Teamwork Highlighted the need to enrich “the lives of his organizational and community family” while simultaneously focusing on making a profit. ADMINISTRATIVE MANAGEMENT: PIONEERED BY SPAULDING, FAYOL, AND WEBER 2 • Fayol was not the first to investigate management behavior, but he was the first to systematize it. • His most important work, General and Industrial Management, was translated into English in 1930. • Fayol was the first to identify the major functions of management—planning, organizing, leading, and controlling. © McGraw Hill ADMINISTRATIVE MANAGEMENT: PIONEERED BY SPAULDING, FAYOL, AND WEBER 3 Weber believed bureaucracy was a rational, efficient, ideal organization based on principles of logic. A better-performing organization, he felt, should have five positive bureaucratic features: 1. A well-defined hierarchy of authority 2. Formal rules and procedures 3. A clear division of labor, with parts of a complex job being handled by specialists 4. Impersonality, without reference or connection to a particular person 5. Careers based on merit © McGraw Hill THE PROBLEM WITH THE CLASSICAL VIEWPOINT: TOO MECHANISTIC • A flaw in the classical viewpoint is that it tends to view humans as cogs within a machine, not taking into account the importance of human needs. • The essence of the classical viewpoint was that work activity was amenable to a rational approach. • The classical viewpoint also led to such innovations as management by objectives and goal setting. © McGraw Hill BEHAVIORAL VIEWPOINT: BEHAVIORISM, HUMAN RELATIONS, AND BEHAVIORAL SCIENCE 1 Behavioral viewpoint: Emphasized the importance of understanding human behavior and motivating employees toward achievement Developed over three phases: 1. Early behaviorism 2. The human relations movement 3. Behavioral science © McGraw Hill BEHAVIORAL VIEWPOINT: BEHAVIORISM, HUMAN RELATIONS, AND BEHAVIORAL SCIENCE 2 • Early Behaviorism: Pioneered by Munsterberg, Follett, and Mayo • The Human Relations Movement: Pioneered by Maslow and McGregor • The Behavioral Science Approach © McGraw Hill AP Images EARLY BEHAVIORISM: PIONEERED BY MUNSTERBERG, FOLLETT, AND MAYO 1 Hugo Munsterberg is called the father of industrial psychology. He suggested that psychologists could contribute to industry in three ways: 1. Study jobs and determine which people are best suited to specific jobs. 2. Identify the psychological conditions under which employees do their best work. 3. Devise management strategies to influence employees to follow management’s interests. © McGraw Hill EARLY BEHAVIORISM: PIONEERED BY MUNSTERBERG, FOLLETT, AND MAYO 2 • Mary Parker Follett was lauded as a female pioneer in the fields of civics and sociology. • Follett thought organizations should become more democratic, with managers and employees working cooperatively. • Three key ideas in making organizations more democratic © McGraw Hill EARLY BEHAVIORISM: PIONEERED BY MUNSTERBERG, FOLLETT, AND MAYO 3 Mayo led a Harvard research group to conduct worker productivity studies at Western Electric’s Hawthorne (Chicago) plant in the late 1920s. Hawthorne Effect: • © McGraw Hill Employees worked harder if they received added attention, if they thought that managers cared about their welfare, or that supervisors paid special attention to them. THE HUMAN RELATIONS MOVEMENT: PIONEERED BY MASLOW • Abraham Maslow and the Hierarchy of Needs • Maslow observed that his patients had certain innate needs that had to be satisfied before they could reach their fullest potential. © McGraw Hill THE HUMAN RELATIONS MOVEMENT: PIONEERED BY MCGREGOR • Douglas McGregor came to realize that it was not enough for managers to try to be liked; they also needed to be aware of their attitudes toward employees. • These attitudes could be thought of as either “X” or “Y.” © McGraw Hill THE BEHAVIORAL SCIENCE APPROACH • Behavioral science relies on scientific research for developing theories about human behavior that can be used to provide practical tools for managers. • The disciplines of behavioral science include psychology, sociology, anthropology, and economics. © McGraw Hill QUANTITATIVE VIEWPOINTS: OPERATIONS MANAGEMENT AND EVIDENCE-BASED MANAGEMENT • Operations Management: Being More Effective • Evidence-Based Management: Facing Hard Facts, Rejecting Nonsense © McGraw Hill OPERATIONS MANAGEMENT: BEING MORE EFFECTIVE Operations management consists of all the job functions and activities in which managers: • Schedule and delegate work and job training, • Plan production to meet customer needs, • Design services customers want and how to deliver them, • Locate and design company facilities, and • Choose optimal levels of product inventory to keep costs down and reduce backorders. © McGraw Hill EVIDENCE-BASED MANAGEMENT: FACING HARD FACTS, REJECTING NONSENSE Evidence-based management is based on the belief that: • Facing the hard facts about what works and what doesn’t, • Understanding the dangerous half-truths that constitute so much conventional wisdom about management, and • Rejecting the total nonsense that too often passes for sound advice will help organizations perform better. © McGraw Hill THE SYSTEMS VIEWPOINT 1 • The Systems Viewpoint • The Four Parts of a System © McGraw Hill THE SYSTEMS VIEWPOINT 2 • Managers must understand how the different parts of an organization come together to achieve its goals in order to diagnose problems and develop effective solutions. • Even though a system may not work very well, it is nevertheless still a system. © McGraw Hill THE FOUR PARTS OF A SYSTEM • Systems may be open or closed. The four parts of a system are: 1. Inputs 2. Transformational processes 3. Outputs 4. Feedback © McGraw Hill • Synergy in a system creates an effect that is greater than the sum of individual efforts. • Systems viewpoint led to the development of Complexity Theory. FIGURE 2.2 THE FOUR PARTS OF A SYSTEM Access the text alternative for slide images. © McGraw Hill CONTINGENCY VIEWPOINT • The contingency viewpoint began to develop when managers discovered that under some circumstances better results could be achieved by breaking the one-best-way rule. • The beauty, and simplicity, of contingency theory lies in the proposition that there is not one best way to manage. © McGraw Hill CONTEMPORARY APPROACHES • The Learning Organization: Sharing Knowledge and Modifying Behavior • High-Performance Work Practices • Shared Value and Sustainable Development: Going beyond Profits • Responsible Management Education: The United Nations Takes the Lead © McGraw Hill THE LEARNING ORGANIZATION: SHARING KNOWLEDGE AND MODIFYING BEHAVIOR • Keep on learning. • Individuals who embrace learning make the organization smarter and contribute to its growth. • A key challenge for managers, therefore, is to establish a culture of shared knowledge and values that will enhance their employees’ ability to learn. © McGraw Hill Three parts of a learning organization: 1. Creating and acquiring knowledge 2. Transferring knowledge 3. Modifying behavior HIGH-PERFORMANCE WORK PRACTICES The job of management, according to this viewpoint, is to create human resource (HR) practices that foster employee development and overall wellbeing. High-performance work practices include: • Ability-enhancing practices • Motivation-enhancing practices • Opportunity-enhancing practices © McGraw Hill SHARED VALUE AND SUSTAINABLE DEVELOPMENT: GOING BEYOND PROFITS • Shared value and sustainable development look beyond short-term profits and focuses on the environmental and social costs of doing business. • Sustainable development focuses on meeting the needs of the present without compromising the ability of future generations to meet their own needs. • Shared value and sustainable development is where business and sustainability intersect. © McGraw Hill RESPONSIBLE MANAGEMENT EDUCATION: THE UNITED NATIONS TAKES THE LEAD • The growing importance of shared value and sustainable development has led the United Nations (UN) to tackle the issue. • In 2007, the organization launched Principles for Responsible Management Education (PRME). • The mission of PRME is to “transform business and management education, research and thought leadership globally, while promoting awareness about the Sustainable Development Goals [SDGs], and developing the responsible business leaders of tomorrow.” © McGraw Hill CAREER CORNER: MANAGING YOUR CAREER READINESS 1 • Recruiters expect you to do some research, just as you would for a class assignment. • That’s good for both you and a potential employer because it helps identify the likely level of fit between the two of you. • Good fit, in turn, is associated with more positive work attitudes and task performance, lower intentions to quit, and less job-related stress. © McGraw Hill FIGURE 2.3 MODEL OF CAREER READINESS Access text descriptions for image. © McGraw Hill CAREER CORNER: MANAGING YOUR CAREER READINESS 3 To demonstrate that you understand a business, you should learn the following 7 things about a company before showing up for an interview: 1. The company’s missions and vision statements 2. The company’s core values and culture 3. The history of the company 4. Key organizational players 5. The company’s products, service, and clients 6. Current events and accomplishments 7. Comments from current or previous employers © McGraw Hill End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 2 (PPT2B) CHAPTER 3 THE MANAGER’S WORK ENVIRONMENT AND ETHICAL RESPONSIBILITIES Doing the Right Thing © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 3-1 Describe the triple bottom line of people, planet, and profit. 3-2 Identify important stakeholders inside the organization. 3-3 Identify important stakeholders outside the organization. 3-4 Explain the importance of ethics and values in effective management. 3-5 Describe the concept of social responsibility and its role in today’s organizations. 3-6 Discuss the role of corporate governance in assessing management performance. 3-7 Describe how to develop the career readiness competency of professionalism/work ethic. © McGraw Hill MANAGE U: BEING COURAGEOUS AT WORK • Practice in a Low-Risk Setting • Plan for an Endurance Event • Rely on Self-Regulation after the Act of Courage © McGraw Hill THE GOALS OF BUSINESS: MORE THAN MAKING MONEY The Triple Bottom Line: People, Planet, and Profit Younger Workers’ Search for Meaning © McGraw Hill THE TRIPLE BOTTOM LINE: PEOPLE, PLANET, AND PROFIT • • © McGraw Hill In this view of corporate performance, an organization has a responsibility to its people, planet, and profit. Success in these areas can be measured through a social audit. YOUNGER WORKERS’ SEARCH FOR MEANING • • • © McGraw Hill Millennials (born between 1981 and 1996) and Gen Zers (born after 1997) care about the triple bottom line. Younger workers expect more from the organizations they work for and do business with. These generations want things like meaningful work and products that represent their personal values more than older generations ever did. THE COMMUNITY OF STAKEHOLDERS INSIDE THE ORGANIZATION Internal and External Stakeholders Internal Stakeholders © McGraw Hill 7 INTERNAL AND EXTERNAL STAKEHOLDERS • © McGraw Hill Managers operate in two organizational environments, both made up of various stakeholders. INTERNAL STAKEHOLDERS Large or small, your organization has people in it who have both an important stake in how it performs and the power to shape its future. • Employees • Owners • Board of Directors © McGraw Hill THE COMMUNITY OF STAKEHOLDERS Figure 3.1. Source: From Diverse Teams at Work by Lee Gardenswartz. Published by the Society for Human Resource Management. © McGraw Hill Access the text alternative for slide images. THE COMMUNITY OF STAKEHOLDERS OUTSIDE THE ORGANIZATION The Task Environment The General Environment © McGraw Hill 11 THE TASK ENVIRONMENT Task environment consists of 10 groups that interact with the organization on a regular basis. © McGraw Hill • • • • • • • • • • Customers Competitors Suppliers Distributors Strategic Allies Employee Organizations Local Communities Financial Institutions Government Regulators Special-Interest Groups THE GENERAL ENVIRONMENT • • • © McGraw Hill The general environment includes six forces: economic, technological, sociocultural, demographic, political–legal, and international. You may be able to control some forces in the task environment, but you can’t control those in the general environment. As a manager you need to keep your eye on the far horizon because these forces of the general environment can affect long-term plans and decisions. THE GENERAL ENVIRONMENT: FIGURE 3.2 STATES WHERE MARIJUANA IS LEGAL Source: “State Medical Marijuana Laws,” National Conference of State Legislatures, October 16, 2019, https://www.ncsl.org/ research/health/state-medical-marijuana-laws.aspx. Access the text description for slide image. © McGraw Hill THE ETHICAL RESPONSIBILITIES REQUIRED OF YOU AS A MANAGER Defining Ethics and Values Four Approaches to Resolving Ethical Dilemmas White-Collar Crime, SarbOx, and Ethical Training How Organizations Can Promote Ethics © McGraw Hill DEFINING ETHICS AND VALUES Ethical standards may vary among countries and among cultures. Six most common workplace behaviors that are considered ethical misconduct. • Conflicts of interest • Abusive behaviors • Violations of health and safety regulations • Corruption • Discrimination • Sexual harassment Values and value systems are the underpinnings for ethics and ethical behavior. © McGraw Hill DEFINING ETHICS AND VALUES: FIGURE 3.3 GLOBAL RATES OF UNETHICAL WORKPLACE BEHAVIOR Source: Ethics & Compliance Initiative, “2019 Global Business Ethics Survey: Workplace Misconduct and Reporting—a Global Look,” 2019, https://43wli92bfqd 835mbif2ms9qz-wpengine .netdna-ssl.com/wp-content/ uploads/Global-Business-Ethics- Survey-2019-Third-Report-1.pdf. Access text description for slide image. © McGraw Hill FOUR APPROACHES TO RESOLVING ETHICAL DILEMMAS The Utilitarian Approach: • For the Greatest Good The Individual Approach: • For Your Greatest Self-Interest Long Term, Which Will Help Others The Moral-Rights Approach: • Respecting Fundamental Rights Shared by Everyone The Justice Approach: • © McGraw Hill Respecting Impartial Standards of Fairness WHITE-COLLAR CRIME, SARBOX, AND ETHICAL TRAINING • Executives’ deceits generated a great deal of public outrage, and as a result Congress passed the Sarbanes-Oxley Act. • Sarbanes–Oxley Act established requirements for proper financial record keeping for public companies. • It also requires companies to have established procedures and guidelines for audit committees. © McGraw Hill HOW ORGANIZATIONS CAN PROMOTE ETHICS Ethics needs to be an everyday affair, not a one-time thing. There are several ways an organization may promote high ethical standards: • Creating a strong ethical climate • Screening prospective employees • Instituting ethics codes and training programs • Rewarding ethical behavior: protecting whistle-blowers • Using a multi-faceted approach © McGraw Hill THE SOCIAL RESPONSIBILITIES REQUIRED OF YOU AS A MANAGER Corporate Social Responsibility: The Top of the Pyramid Is Social Responsibility Worthwhile? Opposing and Supporting Viewpoints One Type of Social Responsibility: Climate Change, Sustainable Development, and Natural Capital Another Type of Social Responsibility: Undertaking Philanthropy, “Not Dying Rich” Does Being Good Pay Off? © McGraw Hill CORPORATE SOCIAL RESPONSIBILITY: THE TOP OF THE PYRAMID Corporate social responsibility rests at the top of a pyramid of a corporation’s obligations, right up there with economic, legal, and ethical obligations. The responsibilities of an organization in the global economy should take the following priorities: • Be a good global corporate citizen. • Be ethical in its practices. • Obey the law. • Make a profit. © McGraw Hill CORPORATE SOCIAL RESPONSIBILITY: THE TOP OF THE PYRAMID. Figure 3.4 Carroll’s global corporate social responsibility pyramid. Source: A. Carroll, “Managing Ethically and Global Stakeholders: A Present and Future Challenge,” Academy of Management Executive, May 2004, p. 116. Access text description for slide image. © McGraw Hill IS SOCIAL RESPONSIBILITY WORTHWHILE? OPPOSING AND SUPPORTING VIEWPOINTS Against Social Responsibility: • Unless a company focuses on maximizing profits, it will become distracted and fail to provide goods and services, benefit the stockholders, create jobs, and expand economic growth. • This supports the efforts of companies to set up headquarters in name only in offshore tax havens in order to minimize their tax burden. For Social Responsibility: • A company must be concerned for society’s welfare as well as for corporate profits. • Beyond ethical obligation, the rationale for social responsibility is the belief that it is good for business, morally appropriate, or important to employees. © McGraw Hill ONE TYPE OF SOCIAL RESPONSIBILITY: CLIMATE CHANGE, SUSTAINABLE DEVELOPMENT, AND NATURAL CAPITAL • Nearly everyone is aware of the growing threat of climate change and global warming. • Scientists say global warming is a “clear and unequivocal emergency” and that without significant changes, the world will face “untold human suffering. • Sustainable development, is economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs. © McGraw Hill ANOTHER TYPE OF SOCIAL RESPONSIBILITY: UNDERTAKING PHILANTHROPY, “NOT DYING RICH” • • • © McGraw Hill “He who dies rich dies thus disgraced” (Andrew Carnegie) The Bill and Melinda Gates Foundation, has pledged to spend billions on health, education, and overcoming poverty. The Gateses have been joined by 169 other billionaires from 22 countries. DOES BEING GOOD PAY OFF? • Indeed it pays to be ethical and socially responsible. • An organization’s commitment to CSR may be an important factor for you to consider during job searches. • Supportive findings are shown in Table 3.1. © McGraw Hill CORPORATE GOVERNANCE Corporate Governance and Ethics • Good corporate governance can contribute to more ethical and socially responsible organizations. • CEO accountability, board composition, and CSR contracting are important governance factors for organizations and their boards to consider. Corporate Governance and Social Responsibility • Corporate governance is about such matters as long-term strategies, sustainable finances, accurate reporting, and positive work environment. © McGraw Hill FIGURE 3.5 CAREER READINESS COMPETENCIES Access text description for slide image. © McGraw Hill CAREER CORNER: FOCUS ON THE GREATER GOOD AND ON BEING MORE ETHICAL Focus on the greater good and on being more ethical: • Reduce your carbon footprint. • Foster positive emotions in yourself and others. • Spend time in nature. • Get the proper amount of sleep. • Increase your level of exercise. • Expand your awareness of social realities. • Fulfill your promises and keep appointments. • Avoid people who lack integrity. © McGraw Hill CAREER CORNER: BECOME AN ETHICAL CONSUMER Purchase Fair Trade items. Don’t purchase items that aren’t ethically made or sourced. Bring your own grocery bags. Don’t buy knockoffs. © McGraw Hill End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 3 (PPT3) CHAPTER 5 Planning The Foundation of Successful Management © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Copyright © Olivier Renck / Getty Images LEARNING OBJECTIVES 5-1 Discuss the role of strategic management. 5-2 Compare mission, vision, and value statements. 5-3 Discuss the types and purposes of goals and plans. 5-4 Describe SMART goals and their implementation. 5-5 Outline the planning/control cycle. 5-6 Describe how to develop the career readiness competency of proactive learning orientation. © McGraw Hill, LLC MANAGE U: START YOUR CAREER OFF RIGHT BY PLANNING 1 SETTING GOALS AND MAKING A PLAN 1. Identify your options. 2. Explore conditions in your target field. 3. Create your action plan. 4. Track your progress. © McGraw Hill, LLC MANAGE U: START YOUR CAREER OFF RIGHT BY PLANNING 2 STAYING RESILIENT DURING THE PROCESS: 1. Know that it takes time to find a job, especially one that’s a good fit for both you and the company that hires you. 2. Create a budget to be sure your income will cover your day-to-day expenses. 3. Avoid making any major financial commitments until you’ve actually landed your target job and have a steady paycheck. © McGraw Hill, LLC PLANNING AND STRATEGY Planning, Strategy, and Strategic Management Why Planning and Strategic Management are Important © McGraw Hill, LLC PLANNING, STRATEGY, AND STRATEGIC MANAGEMENT Planning: Coping with Uncertainty Strategy: Setting Long-Term Direction Strategic Management: Involving All Managers in Strategy © McGraw Hill, LLC PLANNING AND STRATEGIC MANAGEMENT Access alternative text for slide images. © McGraw Hill, LLC WHY PLANNING AND STRATEGIC MANAGEMENT ARE IMPORTANT Providing Direction and Momentum Encouraging New Ideas Developing a Sustainable Competitive Advantage © McGraw Hill, LLC DEVELOPING A SUSTAINABLE COMPETITIVE ADVANTAGE Competitive advantage: • The ability of an organization to produce goods or services more effectively than its competitors do, thereby outperforming them. Sustainable competitive advantage: • Occurs when an organization is able to get and stay ahead in four areas: 1.In being responsive to customers 2.In innovating 3.In quality 4.In effectiveness © McGraw Hill, LLC FUNDAMENTALS OF PLANNING Mission, Vision, and Values Statements Three Types of Planning for Three Levels of Management: Strategic, Tactical, and Operational © McGraw Hill, LLC MAKING PLANS Figure 5.2 Access alternative text for slide image. © McGraw Hill, LLC MISSION, VALUES, AND VALUES STATEMENTS The Mission Statement: “What Is Our Reason for Being?” The Vision Statement: “What Do We Want to Become?” The Values Statement: “What Values Do We Want to Emphasize?” © McGraw Hill, LLC THREE TYPES OF PLANNING FOR THREE LEVELS OF MANAGEMENT: STRATEGIC, TACTICAL, AND OPERATIONAL Figure 5.3 Access the text alternative for slide images. © McGraw Hill, LLC GOALS AND PLANS Long-Term and Short-Term Goals The Operating Plan and Action Plan Plans Are Great, but . . . © McGraw Hill, LLC LONG-TERM AND SHORT-TERM GOALS • A goal, also known as an objective, is a specific commitment to achieve a measurable result within a stated period of time. • Long-term goals are generally referred to as strategic goals. • Short-term goals are sometimes referred to as tactical or operational goals, or just plain goals. © McGraw Hill, LLC THE OPERATING AND ACTION PLANS Operating Plan: • A plan that breaks long-term output into shortterm targets or goals • Turns strategic plans into actionable short-term goals and action plans Action Plan: • Defines the course of action (the tactics) needed to achieve a stated goal • Contains a project date for completing the desired activities for each tactic © McGraw Hill, LLC PLANS ARE GREAT, BUT… • Unless plans are effectively executed, they won’t be worth more than the paper they are written on. • A well-executed plan can spur growth and create a competitive advantage. © McGraw Hill, LLC PROMOTING CONSISTENCIES IN GOALS: SMART GOALS, MANAGEMENT BY OBJECTIVES, AND GOAL CASCADING SMART Goals Management by Objectives: The Four-Step Process for Motivating Employees Cascading Goals: Making Lower-Level Goals Align with Top Goals The Importance of Deadlines © McGraw Hill, LLC SMART GOALS 1 Specific: Goals should be stated in specific terms. Measurable: Goals should be measurable or quantifiable. Attainable: Goals should be realistic. Results-oriented: Goals should support the organization’s vision. Target Date: Goals should have deadline dates for attainment. © McGraw Hill, LLC SMART GOALS 2 SMART GOAL NOT-SO-SMART GOAL Increase sales revenue by 15% across by the end of the quarter. Increase sales revenue. © McGraw Hill, LLC SMART GOALS 3 Figure 5.4 Source: Adapted from E.A. Locke and G.P. Latham, A Theory of Goal Setting and Task Performance (Englewood Cliffs, NJ: Prentice Hall, 1990). Access alternative text for slide image. © McGraw Hill, LLC MANAGEMENT BY OBJECTIVES: THE FOUR-STEP PROCESS FOR MOTIVATING EMPLOYEES • • • • Jointly set objectives. Develop an action plan. Periodically review performance. Give performance appraisal and rewards. © McGraw Hill, LLC IT IS BEST TO CASCADE GOALS ORGANIZATIONWIDE Top management and middle management must be committed. The goals must be applied organization wide. Goals must cascade—be linked consistently down through the organization. © McGraw Hill, LLC THE IMPORTANCE OF DEADLINES • Deadlines can help concentrate the mind. • Deadlines help you ignore extraneous matters in favor of what’s important. • Deadlines provide a mechanism for giving ourselves feedback. © McGraw Hill, LLC THE PLANNING/CONTROL CYCLE Figure 5.5 Source: Robert Kreitner, Management, 8th edition. © McGraw Hill, LLC Access the text alternative for slide images. CAREER CORNER: MANAGING YOUR CAREER READINESS Becoming More Proactive Keeping an Open Mind and Suspending Judgement © McGraw Hill, LLC CAREER CORNER: CAREER READINESS COMPETENCIES Access alternative text for slide image. © McGraw Hill, LLC BECOMING MORE PROACTIVE • Focus on solutions rather than problems. • Take initiative and rely on yourself. • Set realistic goals and don’t overpromise. • Participate and contribute to personal and professional conversations. © McGraw Hill, LLC KEEPING AN OPEN MIND AND SUSPENDING JUDGEMENTS Step 1: Make a list of your current tasks, projects, or commitments at school or work. Step 2: For each task listed in step one, identify the key moments it would be important to be openminded and suspend judgment. Step 3: For each of these moments, think of how you might apply the four key skills of being open minded. • • • • © McGraw Hill, LLC Question your beliefs. Pause and seek feedback. Watch for communication blocks. Check the accuracy of your past judgments and predictions. End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 4 (PPT4A) CHAPTER 6 STRATEGIC MANAGEMENT How Exceptional Managers Realize a Grand Design © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 6-1 Identify the three principles underlying strategic 6-2 6-3 6-4 6-5 6-6 6-7 © McGraw Hill positioning. Outline the five steps in the strategic-management process. Explain how an organization assesses the competitive landscape. Explain the three methods of corporate-level strategy. Discuss Porter’s and Welch’s techniques for formulating a business-level strategy. Describe how to create, execute, and control a functional-level strategy. Describe how to enhance your strategic thinking. MANAGE U – YOUR PERSONAL BRAND REQUIRES A STRATEGY • • Why You Need a Personal Brand How to Create Your Brand: • Identify the core message of your brand. • Write a personal branding statement. • Develop a social media strategy. • Start networking. © McGraw Hill STRATEGIC POSITIONING AND LEVELS OF STRATEG Strategic Positioning and Levels of Strategy Levels of Strategy Does Strategic Management Work for Small as Well as Large Firms? © McGraw Hill STRATEGIC POSITIONING AND ITS PRINCIPLES Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. Strategy is the creation of a unique and valuable position. • Few needs, many customers • Broad needs, few customers • Broad needs, many customers Strategy requires trade-offs in competing. Strategy involves creating a “fit” among activities. © McGraw Hill LEVELS OF STRATEGY • Corporate-Level Strategy • Business-Level Strategy • Functional-Level Strategy © McGraw Hill FIGURE 6.1 THREE LEVELS OF STRATEGY Access text alternate for slide images. © McGraw Hill DOES STRATEGIC MANAGEMENT WORK FOR SMALL AS WELL AS LARGE FIRMS? • Evidence reveals that the use of strategic management techniques and processes is associated with increased small business performance. • Surprisingly, however, many small business owners do not engage in strategic planning. © McGraw Hill FIGURE 6.2 THE STRATEGIC-MANAGEMENT PROCESS Access the text alternative for slide images. © McGraw Hill THE STRATEGIC-MANAGEMENT PROCESS The Five Steps of the Strategic-Management Process: 1. Establish the Mission, Vision, and Values Statements 2. Assess the Current Reality 3. Formulate Corporate, Business, and Functional Strategies 4. Strategic Implementation: Execute the Strategies 5. Maintain Strategic Control: The Feedback Loop © McGraw Hill ASSESSING THE CURRENT REALITY SWOT Analysis Using VRIO to Assess Competitive Potential: Value, Rarity, Imitability, and Organization Forecasting: Predicting the Future Benchmarking: Comparing the Best © McGraw Hill SWOT ANALYSIS SWOT analysis is a good first step at gaining insight into whether or not a company has competitive advantage. SWOT analysis is a situational analysis in which a company assesses its strengths, weaknesses, opportunities, and threats. • Internal Environment: Analysis of internal strengths and weaknesses • External Environment: Analysis of external opportunities and threats © McGraw Hill FIGURE 6.3 SWOT ANALYSIS SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Access alternate text for slide images. © McGraw Hill USING VRIO TO ASSESS COMPETITIVE POTENTIAL: VALUE, RARITY, IMITABILITY, AND ORGANIZATION • VRIO (pronounced by its letters, “V-R-I-O”) is a framework for analyzing a resource or capability to determine its competitive strategic potential by answering four questions about its value, rarity, imitability, and organization Access text alternate for slide image. © McGraw Hill FIGURE 6.4. Is the resource or capability . . . Source: Adapted from F. T. Rothaermel, Strategic Management: Concepts and Cases (New York: McGraw-Hill Education, 2012), p. 91 FORECASTING: PREDICTING THE FUTURE • Trend Analysis • Contingency Planning: Predicting Alternative Futures © McGraw Hill BENCHMARKING: COMPARING WITH THE BEST FIGURE 6.5 Airline benchmarks, 2019 Source: Based on S. McCartney, “The Best and Worst U.S. Airlines of 2019,” The Wall Street Journal, January 15, 2020, https://www.wsj.com/articles/ the-best-and-worst-u-sairlines-of-201911579097301?mod=searchre sults&page=1&pos=3. © McGraw Hill Access alternate text for slide image. ESTABLISHING CORPORATE-LEVEL STRATEGY Three Overall Types of Corporate Strategy The BCG Matrix Diversification Strategy © McGraw Hill Three Overall Types of Corporate Strategy Growth strategy: • Involves expansion, as in sales revenues, market share, number of employees, or number of customers. Stability: • Involves little or no significant change. Defensive: • Involves reduction in the organization’s efforts. • Retrenchment © McGraw Hill THE BCG MATRIX FIGURE 6.6. The BCG matrix. Matrix growth is divided into two categories, low and high. Market share also is divided into low and high. Thus, in this matrix, “stars” are business unites that are highly desirable (high growth, high market share), compared to “dogs,” which are not so desirable (low growth, low market share). Access the text alternative for slide images. © McGraw Hill THE DIVERSIFICATION STRATEGY • Companies generally diversify to either grow revenue or reduce risk. • They grow revenue because the company now has new products and services to sell. © McGraw Hill ESTABLISHING BUSINESS-LEVEL STRATEGY • Porter’s Five Competitive Forces • Porter’s Four Competitive Strategies • An Executive’s Approach toward Strategy Development © McGraw Hill PORTER’S FIVE COMPETITIVE FORCES Porter contends that business-level strategies originate in five primary competitive forces in the firm’s environment: 1. Threat of new entrants 2. Bargaining power of suppliers 3. Bargaining power of buyers 4. Threats of substitute products or services 5. Rivalry among competitors © McGraw Hill PORTER’S FOUR COMPETITIVE STRATEGIES • Cost-Leadership Strategy: Keeping costs and prices low for a wide market • Differentiation Strategy: Offering unique and superior value for a wide market • Cost-Focus Strategy: Keeping costs and prices low for a narrow market • Focused-Differentiation Strategy: Offering unique and superior value for a narrow market © McGraw Hill AN EXECUTIVE’S APPROACH TOWARD STRATEGY DEVELOPMENT • What does the playing field look like now? • What has the competition been up to? • What have you been up to? • What’s around the corner? • What’s your winning move? © McGraw Hill STRATEGIC IMPLEMENTATION: CREATING, EXECUTING, AND CONTROLLING FUNCTIONAL-LEVEL STRATEGIES Strategic Implementation: Creating, Executing, and Controlling Functional-Level Strategies Execution: Getting Things Done The Three Core Processes of Business: People, Strategy, and Operations Execution Roadblocks Maintaining Strategic Control © McGraw Hill STRATEGIC IMPLEMENTATION: CREATING, EXECUTING, AND CONTROLLING FUNCTIONALLEVEL STRATEGIES • Higher-level corporate- and business-level strategies flow down to the functional strategy. • This is similar to goal cascading, which ensures that higher-level goals are communicated and aligned with the goals at the next levels down in the organizational hierarchy. • Typical functional areas include marketing, finance, human resources, operations, information technology, and distribution. © McGraw Hill EXECUTION: GETTING THINGS DONE FIGURE 6.7. An example of strategic implementation at Kroger. Access text alternate for slide image. © McGraw Hill THE THREE CORE PROCESSES OF BUSINESS: PEOPLE, STRATEGY, AND OPERATIONS A company’s overall ability to execute is a function of effectively executing according to three processes: people, strategy, and operations. 1. The First Core Process—People: “You need to consider who will benefit you in the future.” 2. The Second Core Process—Strategy: “You need to consider how success will be accomplished.” 3. The Third Core Process—Operations: “You need to consider what path will be followed.” © McGraw Hill EXECUTION ROADBLOCKS Execution doesn’t always go smoothly and managers may face obstacles to strategic implementation for many different reasons. • Overcoming roadblocks in the C-suite • Overcoming roadblocks down the hierarchy © McGraw Hill MAINTAINING STRATEGIC CONTROL • • • • Engage people. Keep it simple. Stay focused. Keep moving. © McGraw Hill CAREER CORNER: MODEL OF CAREER READINESS FIGURE 6.8. Career readiness competencies. Access alternate text for slide image. © McGraw Hill CAREER CORNER: MANAGING YOUR CAREER READINESS Understand the business. • Understand a potential or current employer’s business and strategies. • Extend your knowledge by networking, seeking mentoring, participating in a job rotation, and attend cross-functional or business meetings. Broaden your task and functional knowledge. • Make connections between concepts, ideas, people, and events. © McGraw Hill End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 4 (PPT4B) LEARNING MODULE 1 Shared Value and Sustainable Development: A New Way to Think about Leading and Managing © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Copyright © Olivier Renck / Getty Images LEARNING OBJECTIVES LM 1-1 Describe how the concept of creating shared value improves upon the traditional approach to corporate social responsibility. LM 1-2 Discuss the roles various stakeholders play in creating shared value. LM 1-3 Explain recommendations for creating shared value in light of current progress and challenges. © McGraw Hill MANAGE U: CONTRIBUTING TO A MORE SUSTAINABLE FUTURE 1. Things you can do from your couch 2. Things you can do at home 3. Things you can do outside your house 4. Things you can do at work © McGraw Hill FROM CORPORATE SOCIAL RESPONSIBILITY TO CREATING SHARED VALUE Traditional CSR Creating Shared Value (CSV) A Model of Shared Value Creation How CSR and CSV Are Fundamentally Different © McGraw Hill TRADITIONAL CSR 1 Does Traditional CSR Run Counter to Shareholders’ Interests? • How does CSR align with Friedman’s perspective? • CSR as a “necessary expense” • The myth of the “fixed pie” of value © McGraw Hill TRADITIONAL CSR 2 Moving Beyond the “Fixed Pie” Perspective. • Firms do not need to “give up” a portion of shareholder wealth in order to be socially responsible. • Maximizing shareholder wealth and increasing social benefit are not mutually exclusive. • This is the essence of Creating Shared Value (CSV)…. © McGraw Hill CREATING SHARED VALUE (CSV) 1 Implementing policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates © McGraw Hill CREATING SHARED VALUE (CSV) 2 CSV Generates Sustainable Competitive Advantages. • CSV moves CSR from a way organizations use profits to a way organizations make profits. • Organizations should pursue only those CSV opportunities that are aligned with firm strategy. © McGraw Hill CREATING SHARED VALUE (CSV) 3 CSV Is Gaining Traction. • Fortune’s annual Change the World list © McGraw Hill A MODEL OF CREATING SHARED VALUE (CSV) Figure LM 1.1 Access alternate texts for the slide image. © McGraw Hill A MODEL OF SHARED VALUE CREATION 1 Key Processes for Creating Shared Value: 1. Discovery of new products, markets, and opportunities 2. Transformation of the value chain 3. Development of supportive local clusters © McGraw Hill A MODEL OF SHARED VALUE CREATION 2 Dynamic Inputs: 1. Consideration of societal benefits, harms, and needs associated with the firm’s products/services 2. Consideration of societal benefits, harms, and needs associated with the firm’s value chain 3. Identification of constraints to productivity/growth in the firm’s geographic region © McGraw Hill HOW CSR AND CSV ARE FUNDAMENTALLY DIFFERENT Scope Alignment with core business strategy © McGraw Hill THE ROLES OF VARIOUS STAKEHOLDERS IN CSV Global Collaboration: The Role of the United Nations The Role of Businesses, Big and Small The Role of Entrepreneurs The Role of Business Schools © McGraw Hill GLOBAL COLLABORATION: THE ROLE OF THE UNITED NATIONS 1 193 member countries agreed to adopt a set of 17 Sustainable Development Goals (SDGs-see figure LM 1.2) © McGraw Hill UN SUSTAINABLE DEVELOPMENT GOALS 1. No poverty 10. Reduced inequalities 2. Zero hunger 11. Sustainable cities and communities 3. Good health and well-being 4. Quality education 5. Gender equality 6. Clean water and sanitation 7. Affordable and clean energy 12. Responsible consumption and production 13. Climate action 14. Life below water 15. Life on land 8. Decent work and economic growth 16. Peace, justice, and strong institutions 9. Industry innovation and infrastructure 17. Partnerships for these goals © McGraw Hill Source: Based on material in “About the Sustainable Development Goals,” the United Nations, https://www.un.org/sustainabledevelopment/sustainable-developmentgoals/. GLOBAL COLLABORATION: THE ROLE OF THE UNITED NATIONS 2 The SDGs Are an Opportunity for CSV. • Key stakeholders working together • CSV is the key to achieving the SDGs • Tremendous market potential © McGraw Hill GLOBAL COLLABORATION: THE ROLE OF THE UNITED NATIONS 3 Private-Sector Involvement Is Critical for Achieving the SDGs. • The SDGs were designed specifically to enlist businesses. • Private sector has necessary resources and capabilities. © McGraw Hill THE ROLE OF BUSINESSES, BIG AND SMALL 1 Big Businesses: • Big businesses are influencers. • Big businesses can mobilize big solutions. © McGraw Hill THE ROLE OF BUSINESSES, BIG AND SMALL 2 Small Businesses: • Account for 90% of world economic activity • Essential for shared value and sustainable development © McGraw Hill THE ROLE OF ENTREPRENEURS 1 Entrepreneurs’ environments are less constrained. • Agility • The problem of inertia in big business © McGraw Hill THE ROLE OF ENTREPRENEURS 2 Entrepreneurs possess important traits. • Creativity • Risk Propensity © McGraw Hill THE ROLE OF BUSINESS SCHOOLS 1 Business Schools Take Varied Approaches to Teaching Shared Value. 1. Coursework 2. Experiential Learning 3. Certificate and degree programs 4. Cultural infusion © McGraw Hill THE ROLE OF BUSINESS SCHOOLS 2 Your Knowledge of CSV and the SDGs Enhances Your Career Readiness. • Understanding the business • Proactive learning orientation © McGraw Hill PROGRESS, CHALLENGES, AND RECOMMENDATIONS for CSV Areas of Progress: Areas of Concern: • Awareness of and engagement with CSV and the SDGs • More of the same • Progress toward specific goals • Misalignment with strategy © McGraw Hill • Lack of commitment at the top RECOMMENDATIONS FOR TRANSITIONING TO A SHARED-VALUE MINDSET 1 Set Priorities to Overcome Problems with Strategic Alignment. • Managers should prioritize opportunities for CSV. • Maximize impact in ways that are a good fit for your business. © McGraw Hill RECOMMENDATIONS FOR TRANSITIONING TO A SHARED-VALUE MINDSET 2 Encourage a Long-Term Mindset to Gain Support across the Organization. • Designate special-purpose funds. • Reconfigure executive compensation. © McGraw Hill RECOMMENDATIONS FOR TRANSITIONING TO A SHARED-VALUE MINDSET 3 Break Out of Old Routines by Thinking Bigger. • Managers can no longer see their firms as isolated from their larger environments. • Consider the organization in relation to its ecosystem. • Collaboration is critical. © McGraw Hill CONCLUSION “Businesses can do well while simultaneously doing good.” © McGraw Hill End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 5 (PPT5A) CHAPTER 7 INDIVIDUAL AND GROUP DECISION MAKING How Managers Make Things Happen © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 7-1 Compare rational and nonrational decision making. 7-2 Explain how managers can make decision that are both legal and ethical. 7-3 Describe how evidence-based management and business analytics contribute to decision making. 7-4 Describe how artificial intelligence is used in decision making. 7-5 Compare four decision-making styles. 7-6 Identify barriers to rational decision making and ways to overcome them. 7-7 Outline the basics of group decision making. 7-8 Describe how to develop the career readiness competencies of critical thinking/problem solving and decision making. © McGraw Hill MANAGE U – HOW TO MAKE GOOD DECISIONS • Keep Your Mind Open • Prioritize Your Decisions • Move On from Your Mistakes • Practice Mindfulness © McGraw Hill TWO KINDS of DECISION MAKING: RATIONAL AND NONRATIONAL Rational Decision Making: Managers Should Make Logical and Optimal Decisions • Stage 1: Identify the Problem or Opportunity—Determining the Actual versus the Desirable • Stage 2: Think Up Alternative Solutions—Both the Obvious and the Creative • Stage 3: Evaluate Alternatives and Select a Solution—Ethics, Feasibility, and Effectiveness • Stage 4: Implement and Evaluate the Solution Chosen What’s Wrong with the Rational Model? Nonrational Decision Making: Managers Find It Difficult to Make Optimal Decisions © McGraw Hill RATIONAL DECISION MAKING: MANAGERS SHOULD MAKE LOGICAL AND OPTIMAL DECISIONS Figure 7.1 The Four Stages in Rational Decision Making © McGraw Hill STAGE 1: IDENTIFY THE PROBLEM OR OPPORTUNITY—DETERMINING THE ACTUAL VERSUS THE DESIRABLE • As a manager, you’ll probably find no shortage of problems. • You also will often find opportunities. • Whether you’re confronted with a problem or an opportunity, the decision you’re called on to make is how to make improvements. © McGraw Hill STAGE 2: THINK UP ALTERNATIVE SOLUTIONS— BOTH THE OBVIOUS AND THE CREATIVE • Employees burning with bright ideas are an employer’s greatest competitive resource. • After you’ve identified the problem or opportunity and diagnosed its causes, you need to come up with alternative solutions. © McGraw Hill STAGE 3: EVALUATE ALTERNATIVES AND SELECT A SOLUTION—ETHICS, FEASIBILITY, AND EFFECTIVENESS • • • © McGraw Hill In this stage, you need to evaluate each alternative not only according to cost and quality. Today, the task of evaluating alternatives is facilitated by the use of big data and artificial intelligence. Recent research confirms that firms can make better decisions if they utilize these tools in the decision-making process. STAGE 4: IMPLEMENT AND EVALUATE THE SOLUTION CHOSEN • With some decisions, implementation is usually straightforward. • With other decisions, implementation can be quite difficult; when one company acquires another, for instance, it may take months. © McGraw Hill WHAT’S WRONG WITH THE RATIONAL MODEL? TABLE 7.1 Assumptions of the Rational Model Complete information, no uncertainty: You should obtain complete , errorfree information about all alternative courses of action and the consequences that would follow from each choice. Logical, unemotional analysis: Having no prejudices or emotional blind spots, you are able to logically evaluate the alternatives, raking them from best to worst according to your personal preferences. Best decision for the organization: Confident of the best future course of action, you coolly choose the alternative that you believe will most benefit the organization. © McGraw Hill NONRATIONAL DECISION MAKING: MANAGERS FIND IT DIFFICULT to MAKE OPTIMAL DECISIONS 1 Bounded Rationality, Hubris, and the Satisficing Model: “Satisfactory Is Good Enough” Hindrance Description Complexity The problems that need solving are often exceedingly complex, beyond understanding. Time and money constraints There is not enough money to gather all relevant information. Different cognitive capacity, values, skills, habits, and unconscious reflexes Managers aren’t all built the same way, of course, and all have personal limitations and biases that affect their judgment. Imperfect information Managers have imperfect, fragmentary information about the alternatives and their consequences. Information overload There is too much information for one person to process. Different priorities Some data are considered more important, so certain facts are ignored. Conflicting goals Other managers, including colleagues, have conflicting goals. FIGURE 7.1: Some hindrances to perfectly rational decisions making. © McGraw Hill NONRATIONAL DECISION MAKING: MANAGERS FIND IT DIFFICULT to MAKE OPTIMAL DECISIONS 2 • • • • © McGraw Hill The Intuition Model: “It Just Feels Right” Small entrepreneurs often can’t afford in-depth marketing research and so they make decisions based on hunches. Intuition that stems from expertise—a person’s explicit and tacit knowledge about a person, a situation, an object, or a decision opportunity— is known as a holistic hunch. Intuition based on feelings—the involuntary emotional response to those same matters—is known as automated experience. MAKING ETHICAL DECISIONS The Dismal Record of Business Ethics Road Map to Ethical Decision Making: A Decision Tree © McGraw Hill THE DISMAL RECORD OF BUSINESS ETHICS • According to a recent study the top reason for CEO departures among America’s largest companies is unethical behavior. FIGURE 7.3 Reasons for CEO departures. Source: Data based on J. Green, “CEOs Fired for Ethical Lapses Hit New High as Complaints Soared,” Bloomberg, May 15, 2019, https:// www.bloomberg.com/news/ articles/2019-05-15/ceos-fired-forethical-lapses-hit-new-high-ascomplaints-soared. © McGraw Hill Access text alternative for slide image. ROAD MAP TO ETHICAL DECISION MAKING: A DECISION TREE When confronted with any proposed action for which a decision is required, a manager works through the decision tree by asking the following questions: • Is the proposed action legal? • If “yes,” does the proposed action maximize shareholder value? • If “yes,” is the proposed action ethical? • If “no,” would it be ethical not to take the proposed action? © McGraw Hill FIGURE 7.4 THE ETHICAL DECISION TREE: WHAT’S THE RIGHT THING TO DO? Source: Constance E. Bagley, “The Ethical Leader’s Decision Tree,” Harvard Business School Publishing Corporation, February 2003, https://hbr.org/2003/02/the-ethical-leaders-decision-tree. Access text alternate for slide image. © McGraw Hill EVIDENCE-BASED DECISION MAKING AND DATA ANALYTICS Evidence-Based Decision Making In Praise of Data Analytics Big Data: What It Is, How It’s Used © McGraw Hill EVIDENCE-BASED DECISION MAKING Seven Implementation Principles: 1. Treat your organization as an unfinished prototype. 2. No brag, just facts. 3. See yourself and your organization as outsiders do. 4. Evidence-based management is not just for senior executives. 5. Like everything else, you still need to sell it. 6. If all else fails, slow the spread of bad practice. 7. The best diagnostic question: What happens when people fail? What Makes It Hard to Be Evidence Based? © McGraw Hill IN PRAISE OF DATA ANALYTICS • • © McGraw Hill Data analytics is increasingly done with specialized systems and software. Some leaders and firms have become exceptional practitioners of data analytics. BIG DATA: WHAT IT IS, HOW IT’S USED • • • • • • • © McGraw Hill Big data is stores of data so vast that conventional database management systems cannot handle them. Meeting customer needs Improving human resource management practices Enhancing production efficiency Advancing health and medicine Aiding public policy Using big data up and down the hierarchy ARTIFICIAL INTELLIGENCE IS A POWERFUL DECISION-MAKING RESOURCE Types of AI AI’s Benefits AI’s Drawbacks © McGraw Hill TYPES OF AI • • • • © McGraw Hill You may think of AI as being a 21st-century– based technology that is revolutionizing the way we do things, but the thinking behind AI goes back thousands of years. Automated business processes Data analysis Engaging customers and employees AI’S BENEFITS • • • • © McGraw Hill AI will transform the world as we know it. Humans could be relieved of some of the drudgery of work—and even some of the time commitment today’s jobs often require. Organizations continue to use AI to develop competitive advantage. Enhanced decision making is a thematic benefit of AI. AI’S DRAWBACKS AI has a unique set of challenges that must be overcome. • AI implementation • Data issues • Cost © McGraw Hill • Weaponizing AI • Will AI Replace Us? FIGURE 7.5 BENEFITS OF AI Source: Data based on J. Loucks, T. Davenport, and D. Schatsky, “State of AI in the Enterprise, 2nd Edition,” Deloitte Insights, October 22, 2018, https://www2.deloitte.com/us/en/insigh ts/focus/ cognitive-technologies/stateof-ai-and-intelligent-automation-inbusiness-survey.html. Access text alternative for slide image. © McGraw Hill FOUR GENERAL DECISION-MAKING STYLES Value orientation and tolerance for ambiguity 1. The Directive Style: Action-Oriented Decision Makers Who Focus on Facts 2. The Analytical Style: Careful Decision Makers Who Like Lots of Information and Alternative Choices 3. The Conceptual Style: Decision Makers Who Rely on Intuition and Have a Long-Term Perspective 4. The Behavioral Style: The Most People-Oriented Decision Makers Which Style Do You Have? © McGraw Hill VALUE ORIENTATION AND TOLERANCE FOR AMBIGUITY Value orientation: Some people are very taskfocused at work and do not pay much attention to people issues, whereas others are just the opposite. • Ambiguity: the need for structure or control of one’s life. • A high need for control or structure means a low tolerance for ambiguity. • A low need for control or structure means a high tolerance for ambiguity. © McGraw Hill FIGURE 7.6 DECISION-MAKING STYLES Access alternative text for slide image. © McGraw Hill THE DIRECTIVE STYLE: ACTION-ORIENTED DECISION MAKERS WHO FOCUS ON FACTS • • © McGraw Hill People with a directive style have a low tolerance for ambiguity and are oriented toward task and technical concerns in making decisions. They are efficient, logical, practical, and systematic in their approach to solving problems, and they are action oriented and decisive and like to focus on facts. THE ANALYTICAL STYLE: CAREFUL DECISION MAKERS WHO LIKE LOTS OF INFORMATION AND ALTERNATIVE CHOICES • • • © McGraw Hill Managers with an analytical style have a much higher tolerance for ambiguity and respond well to new or uncertain situations. Analytical managers like to consider more information and alternatives than those adopting the directive style. They are careful decision makers who take longer to make decisions, but they also tend to overanalyze a situation. THE CONCEPTUAL STYLE: DECISION MAKERS WHO RELY ON INTUITION AND HAVE A LONG-TERM PERSPECTIVE • People with a conceptual style have a high tolerance for ambiguity and tend to focus on the people or social aspects of a work situation. • They take a broad perspective to problem solving and like to consider many options and future possibilities. • Conceptual types adopt a long-term perspective and rely on intuition and discussions with others to acquire information. • They also are willing to take risks and are good at finding creative solutions to problems. © McGraw Hill THE BEHAVIORAL STYLE: THE MOST PEOPLEORIENTED DECISION MAKERS • The behavioral style is the most people-oriented of the four styles. People with this style work well with others and enjoy social interactions in which opinions are openly exchanged. • Behavioral types are supportive, are receptive to suggestions, show warmth, and prefer verbal to written information. • Although they like to hold meetings, some people with this style have a tendency to avoid conflict and to be overly concerned about others. • This can lead them to adopt a wishy-washy approach to decision making and to have a hard time saying no. © McGraw Hill WHICH STYLE DO YOU HAVE? Know Thyself Influence Others Deal with Conflict © McGraw Hill DECISION-MAKING BIASES 1 Ten Common Decision-Making Biases: Rules of Thumb, or “Heuristics” © McGraw Hill 1. The Availability Bias: Using only the information available 2. The Representativeness Bias: Faulty generalizing from a small sample or a single event 3. The Confirmation Bias: Seeking information to support your point of view 4. The Sunk-Cost Bias: Money already spent seems to justify continuing 5. The Anchoring and Adjustment Bias: Being influenced by an initial figure DECISION-MAKING BIASES 2 6. The Overconfidence Bias: Blind to Our Own Blindness 7. The Hindsight Bias: The I-Knew-It-All-Along Effect 8. The Framing Bias: Shaping the Way a Problem Is Presented 9. The Escalation of Commitment Bias: Feeling Overly Invested in a Decision 10. The Categorical Thinking Bias: Sorting Information into Buckets © McGraw Hill GROUP DECISION MAKING: HOW TO WORK WITH OTHERS Advantages and Disadvantages of Group Decision Making Groupthink Characteristics of Group Decision Making Group Problem-Solving Techniques: Reaching for Consensus More Group Problem-Solving Techniques © McGraw Hill ADVANTAGES AND DISADVANTAGES OF GROUP DECISION MAKING Advantages: Disadvantages: • Greater pool of knowledge • A few people dominate or intimidate • Different perspectives • Groupthink • Intellectual stimulation • Satisficing • Better understanding of decision rationale • Goal displacement • Deeper commitment to the decision © McGraw Hill GROUPTHINK • • • © McGraw Hill Cohesiveness isn’t always good. When it results in groupthink, group or team members are friendly and tight-knit but unable to think “outside the box.” The results of groupthink can include failure to consider new information and a loss of new ideas. CHARACTERISTICS OF GROUP DECISION MAKING • They are less efficient. • Their size affects decision quality. • They may be too confident. • Knowledge counts. © McGraw Hill GROUP PROBLEM-SOLVING TECHNIQUES: REACHING FOR CONSENSUS Do’s for achieving consensus: • Use active listening skills. • Involve as many members as possible. • Seek out the reasons behind arguments and dig for the facts. © McGraw Hill Don’ts for achieving consensus: • Avoid horse trading and making an agreement simply to not rock the boat. • Don’t try to achieve consensus by putting questions to a vote. MORE GROUP PROBLEM-SOLVING TECHNIQUES • • • • © McGraw Hill Brainstorming: For Increasing Creativity. Devil’s Advocacy. The Dialectic Method. Project Post-Mortems FIGURE 7.7 DEVIL’S ADVOCATE AND THE DIALECTIC METHOD Source: From R. A. Castler and R.C. Schwenk, “Agreement and Thinking Alike: Ingredients for Poor Decisions,” Academy of Management Executive, February 1990, pp. 72–73. Access text alternative for slide images. © McGraw Hill CAREER CORNER: FIGURE 7.8 MODEL OF CAREER READINESS Access text alternative for slide ima © McGraw Hill CAREER CORNER MANAGING YOUR CAREER READINESS • • • • © McGraw Hill Improving your critical-thinking and problemsolving skills. Reflect on past decisions. Establish a decision methodology. Demonstrate these competencies during a job interview. End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 5 (PPT5B) CHAPTER 13 GROUPS & TEAMS Increasing Cooperation, Reducing Conflict © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 13-1 Identify the characteristics of groups and teams. 13-2 Describe the development of groups and teams. 13-3 Discuss ways managers can build effective teams. 13-4 Describe ways managers can deal successfully with conflict. 13-5 Describe how to develop the career readiness competency of teamwork/collaboration. © McGraw Hill MANAGING TEAM CONFLICT LIKE A PRO • Acknowledge a Conflict Exists • Ask a Lot of Questions • Frame the Conflict around Behavior, Not Personalities • Remind Team Members about the Group Norms • Choose Your Words with Care • Remember Conflict Can Be Productive © McGraw Hill GROUPS VERSUS TEAMS Groups and Teams: How Do They Differ? Formal versus Informal Groups Types of Teams © McGraw Hill GROUPS AND TEAMS: HOW DO THEY DIFFER? • What a Group Is: A Collection of People Performing as Individuals • What a Team Is: A Collection of People with Common Commitment © McGraw Hill FORMAL VERSUS INFORMAL GROUPS • Groups can be either formal or informal. • Formal groups—created to accomplish specific goals • Informal groups—created for friendship © McGraw Hill TYPES OF TEAMS • • • • • Work teams Project teams Cross-functional teams Self-managed teams Virtual teams © McGraw Hill STAGES OF GROUP AND TEAM DEVELOPMENT Tuckman’s Five-Stage Model Punctuated Equilibrium © McGraw Hill TUCKMAN’S FIVE-STAGE MODEL • Stage 1: Forming—“Why are we here?” • Stage 2: Storming—“Why are we fighting over who’s in charge and who does what?” • Stage 3: Norming—“Can we agree on roles and work as a team?” • Stage 4: Performing—“Can we do the job properly?” • Stage 5: Adjourning—“Can we help members transition out?” • Is Tuckman’s model accurate? © McGraw Hill FIGURE 13.1 FIVE STAGES OF GROUP AND TEAM DEVELOPMENT Access text alternate for slide image. © McGraw Hill PUNCTUATED EQUILIBRIUM • Groups don’t always follow the distinct stages of Tuckman’s model. • Punctuated equilibrium establishes periods of stable functioning until an event causes a dramatic change in norms, roles, and/or objectives. • Punctuated equilibrium often occurs in the wake of unexpected change. © McGraw Hill BUILDING EFFECTIVE TEAMS 1 Collaboration—the Foundation of Teamwork Trust: “We Need to Have Reciprocal Faith in Each Other.” Performance Goals and Feedback Motivation through Mutual Accountability and Interdependence Team Composition © McGraw Hill BUILDING EFFECTIVE TEAMS 2 Roles: How Team Members Are Expected to Behave Norms: Unwritten Rules for Team Members Effective Team Processes Putting It All Together © McGraw Hill MANAGING CONFLICT The Nature of Conflict: Disagreement Is Normal Can Too Little or Too Much Conflict Affect Performance? Four Kinds of Conflict: Personality, Envy, Intergroup, and Cross-Cultural How to Stimulate Constructive Conflict Leading Career Readiness Competencies to Help You to Better Handle Conflict Dealing with Disagreements: Five Conflict-Handling Styles © McGraw Hill THE NATURE OF CONFLICT: DISAGREEMENT IS NORMAL • Conflict is simply disagreement, a perfectly normal state of affairs. • Dysfunctional conflict (bad) and functional conflict (good) © McGraw Hill CAN TOO LITTLE OR TOO MUCH CONFLICT AFFECT PERFORMANCE? • Too little conflict—inactivity • Too much conflict—warfare Figure 13.3 The relationship between intensity of conflict and performance outcomes. Sources: Derived from L. D. Brown, Managing Conflict at Organizational Interfaces (Englewood Cliffs, NJ: Prentice- Hall, 1983). Access alternate text for slide image. © McGraw Hill FOUR KINDS of CONFLICT: PERSONALITY, ENVY, INTERGROUP, and CROSS-CULTURAL 1. Personality Conflicts: clashes because of personal dislikes or disagreements 2. Envy-based Conflicts: clashes because of what others have 3. Intergroup Conflicts: clashes among work groups, teams, and departments 4. Cross-Cultural Conflicts: clashes between cultures © McGraw Hill HOW TO STIMULATE CONSTRUCTIVE CONFLICT • Spur competition among employees • Change the organization’s culture and procedures • Bring in outsiders for new perspectives • Use programmed conflict: devil’s advocacy and the dialectic method © McGraw Hill CAREER READINESS COMPETENCIES to HELP YOU to BETTER HANDLE CONFLICT • • • • • Teamwork/collaboration Social intelligence Openness to change Emotional intelligence Oral/written communication © McGraw Hill DEALING WITH DISAGREEMENTS: FIVE CONFLICTHANDLING STYLES • • • • • Avoiding Obliging Dominating Compromising Integrating © McGraw Hill CAREER CORNER: MANAGING YOUR CAREER READINESS • Become a More Effective Team Member • Become a More Effective Collaborator © McGraw Hill CAREER CORNER: MODEL OF CAREER READINESS Access alternate text for slide image. © McGraw Hill End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 6 (PPT6) CHAPTER 8 ORGANIZATIONAL CULTURE, STRUCTURE, & DESIGN © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 8-1 Explain why managers need to align organizational culture, structure, and HR practices to support strategy. 8-2 Explain how to characterize an organization’s culture. 8-3 Describe the process of culture change in an organization. 8-4 Identify the major features of an organization and explain how they are expressed in an organization chart. 8-5 Describe the eight types of organizational structure. 8-6 Explain how to use the career readiness competencies of understanding the business and personal adaptability to better understand and change your level of fit with an organization. © McGraw Hill HOW TO GET NOTICED IN A NEW JOB: FITTING INTO AN ORGANIZATION’S CULTURE IN THE FIRST 60 DAYS • Be Aware of the Power of First Impressions • See How People Behave by Arriving Early and Staying Late • Network with People and Ask Questions about How the Organization Works • Seek Advice Instead of Feedback • Overdeliver © McGraw Hill ALIGNING CULTURE, STRUCTURE, AND HUMAN RESOURCE (HR) PRACTICES TO SUPPORT STRATEGY How an Organization’s Culture, Structure, and HR Practices Support Strategic Implementation You can think of an organization’s culture, structure, and HR practices as three strands in a single rope. These strands must be tightly woven together to drive successful strategic execution. © McGraw Hill Kyoshino/Getty Images HOW AN ORGANIZATION’S CULTURE, STRUCTURE, AND HR PRACTICES SUPPORT STRATEGIC IMPLEMENTATION • Organizational culture: The shared assumptions that affect how work gets done • Organizational structure: Who reports to whom and who does what • HR Practices: How the organization manages its talent • Leadership creates alignment among culture, structure, and HR practices. © McGraw Hill FIGURE 8.1 How Organizational Culture, Organizational Structure, and Human Resource Practices Align to Support Strategic Implementation Source: Figure based in part on C. Ostroff, A. J. Kinicki, and R. S. Muhammad, “Organizational Culture and Climate,” Handbook of Psychology, Volume 12: Industrial and Organizational Psychology, 2nd ed. (Hoboken, NJ: John Wiley & Sons, 2013), Chapter 24, pp. 643–676. Access text alternate for slide image. © McGraw Hill WHAT KIND OF ORGANIZATIONAL CULTURE WILL YOU BE OPERATING IN? The Three Levels of Organizational Culture How Employees Learn Culture: Symbols, Stories, Heroes, Rites and Rituals, and Organizational Socialization Four Types of Organizational Culture: Clan, Adhocracy, Market, and Hierarchy The Importance of Culture Preparing to Assess P–O Fit before a Job Interview © McGraw Hill THE THREE LEVELS OF ORGANIZATIONAL CULTURE Level 1: Observable Artifacts—Physical Manifestations of Culture Level 2: Espoused Values—Explicitly Stated Values and Norms Level 3: Basic Assumptions—Core Values of the Organization © McGraw Hill 8 HOW EMPLOYEES LEARN CULTURE • • • • • Symbols Stories Heroes Rites and Rituals Organizational Socialization © McGraw Hill Monkey Business Images/Shutterstock FOUR TYPES OF ORGANIZATIONAL CULTURE: CLAN, ADHOCRACY, MARKET, AND HIERARCHY Clan Culture: • An Employee-Focused Culture Valuing Flexibility, Not Stability Adhocracy Culture: • A Risk-Taking Culture Valuing Flexibility Market Culture: • A Competitive Culture Valuing Profits over Employee Satisfaction Hierarchy Culture: • © McGraw Hill A Structured Culture Valuing Stability and Effectiveness FIGURE 8.3 COMPETING VALUES FRAMEWORK Source: Adapted from K. S. Cameron, R. E. Quinn, J. Degraff, and A. V. Thakor, Competing Values Leadership (Northampton, MA: Edward Elgar, 2006), p. 32. © McGraw Hill Access alternative text for slide images. THE IMPORTANCE OF CULTURE Many believe culture shapes an organization’s long-term success by enhancing its systems and influencing its important outcomes—and research supports this belief. FIGURE 8.4 WHAT ORGANIZATIONAL VARIABLES ARE ASSOCIATED WITH ORGANIZATIONAL CULTURES? Source: Data taken from C. A. Hartnell, A. Y. Ou, A. J. Kinicki, D. Choi, and E. P. Karam, “A Meta Analytic Test of Organizational Culture’s Association with Elements of an Organization’s System and Its Relative Predictive Validity on Organizational Outcomes.” Journal of Applied Psychology 104, no. 6 (2019), pp. 832–50. © McGraw Hill Access alternative text for slide image. PREPARING TO ASSESS P–O FIT BEFORE A JOB INTERVIEW • Make a list of your personal values, strengths, and weaknesses. • Spend some time learning about the organization you plan to interview with. • Compare your list of personal values, strengths, and weaknesses with those of the organization. © McGraw Hill THE PROCESS OF CULTURE CHANGE 1. Formal statements 7. Physical design 2. Slogans and sayings 8. Rewards, titles, promotions, and bonuses 9. Organizational goals and performance criteria 3. Rites and rituals 4. Stories, legends, and myths 5. Leader reactions to crises 6. Role modeling, training, and coaching 10. Measurable and controllable activities 11. Organizational structure 12. Organizational systems and procedures © McGraw Hill DON’T FORGET ABOUT PERSON–ORGANIZATION FIT • Recall that P–O fit reflects the extent to which your personality and values match the climate and culture in an organization. • P–O fit is important because it can affect your work attitudes and performance. • While it is possible to change an organization’s culture and thus create a better fit, many employees experiencing poor P–O fit end up searching for new jobs. © McGraw Hill THE MAJOR FEATURES OF AN ORGANIZATION Major Features of Organizations: Four Proposed by Edgar Schein Major Features of Organizations: Three More That Most Authorities Agree On The Organization Chart © McGraw Hill MAJOR FEATURES OF ORGANIZATIONS: FOUR PROPOSED BY EDGAR SCHEIN Common purpose: • The means for unifying members Coordinated effort: • Working together for common purpose Division of labor: • Work specialization for greater efficiency Hierarchy of authority: • © McGraw Hill The chain of command MAJOR FEATURES OF ORGANIZATIONS: THREE MORE THAT MOST AUTHORITIES AGREE ON • Span of Control: Narrow (or Tall) versus Wide (or Flat) • Authority—Accountability, Responsibility, and Delegation • Centralization versus Decentralization of Authority © McGraw Hill THE ORGANIZATION CHART The vertical hierarchy of authority: • Who reports to whom The horizontal specialization: • Who specializes in what work © McGraw Hill FIGURE 8.6 THE ORGANIZATION CHART Access text alternative for slide images. © McGraw Hill EIGHT TYPES OF ORGANIZATIONAL STRUCTURE Traditional designs: • Simple, functional, divisional, and matrix structures The horizontal design: • Eliminating functional barriers to solve problems Designs that open boundaries between organizations: hollow, modular, and virtual structures. © McGraw Hill TRADITIONAL DESIGNS: SIMPLE STRUCTURES There is only one hierarchical level of management beneath the owner. Figure 8.7: Simple Structure: An example. © McGraw Hill TRADITIONAL DESIGNS: FUNCTIONAL STRUCTURES Figure 8.8: Functional structure with two examples; one for a business and one for a hospital Access text alternate for slide image. © McGraw Hill TRADITIONAL DESIGNS: DIVISIONAL STRUCTURES Figure 8.9 Three examples of divisional structure: product, customer, and geographic divisions Access alternate text for slide image. © McGraw Hill TRADITIONAL DESIGNS: MATRIX STRUCTURES Figure 8.10: An example of a matrix structure in an arrangement that Ford might use Access text alternate for slide image. © McGraw Hill THE HORIZONTAL DESIGN: ELIMINATING FUNCTIONAL BARRIERS TO SOLVE PROBLEMS Figure 8.11: The horizontal design with a mix of functional (vertical) and project-team (horizontal) arrangements Access text alternate for slide image. © McGraw Hill FIGURE 8.12 THE HOLLOW STRUCTURE This is an example of a personal computer company that outsources noncore processes to vendors. Access text alternate for slide image. © McGraw Hill CAREER CORNER: MODEL OF CAREER READINESS Access text alternate for slide image. © McGraw Hill CAREER CORNER: UNDERSTANDING THE BUSINESS AND WHERE YOU “FIT” IN • Questions to Ask of Your Prospective/New Colleagues • Questions to Ask of Your Prospective/New Boss • Questions to Ask Yourself © McGraw Hill CAREER CORNER: BECOMING MORE ADAPTABLE Personal adaptability is defined as the ability and willingness to adapt to changing situations. Try the following suggestions to increase your level of adaptability. • Focus on being optimistic. • Display a proactive learning orientation. • Be more resourceful. • Take ownership and accept responsibility. • Expand your perspective by asking different questions. © McGraw Hill End of Main Content Because learning changes everything. www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ® Because learning changes everything. ® Week 7 (PPT7) CHAPTER 9 HUMAN RESOURCE MANAGEMENT Getting the Right People for Managerial Success © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. ©Olivier Renck/ Getty Images LEARNING OBJECTIVES 9-1 9-2 9-3 9-4 9-5 9-6 9-7 9-8 9-9 © McGraw Hill Discuss the importance of strategic human resource management. Discuss ways to recruit and hire the right people. Outline common forms of compensation. Describe the processes used for onboarding and learning and development. Discuss effective performance management and feedback techniques. List guidelines for handling promotions, transfers, discipline, and dismissals. Discuss legal considerations managers should be aware of. Describe labor-management issues and ways to work effectively with labor unions. Review the steps for becoming a better receiver of feedback. HOW TO PREPARE FOR A JOB INTERVIEW • • • • • • Ace Your Virtual Screening Be Prepared Dress Right and Be on Time Practice What to Say and What to Ask Know What You Will Be Asked Plan for a Strong Closing © McGraw Hill STRATEGIC HUMAN RESOURCE MANAGEMENT Human Resource Management: Managing an Organization’s Most Important Resource Internal and External HR Fit Promote Strategic HR Management The Role of Human and Social Capital What Is the Best Approach to Strategic Human Resource Management? © McGraw Hill HUMAN RESOURCE MANAGEMENT: MANAGING AN ORGANIZATION’S MOST IMPORTANT RESOURCE • Regardless of industry, all organizations use HR practices to some extent to manage their workers. • Companies listed among the best places to work become famous by offering progressive and valued programs, policies, and procedures. • Effective HRM means putting employees first. © McGraw Hill INTERNAL AND EXTERNAL HR FIT PROMOTE STRATEGIC HR MANAGEMENT • Internal Fit • External Fit FIGURE 9.2 Strategic HRM: How HR practices support strategic implementation. Source: Figure based in part on: C. Ostroff, A. J. Kinicki, and R. S. Muhammad, “Organizational Culture and Climate,” Handbook of Psychology: Volume 12, Industrial and Organizational Psychology, 2nd ed. (Hoboken, NJ: John Wiley & Sons, 2013), Chapter 24, pp. 643–676 Access alternative text for slide image. © McGraw Hill THE ROLE OF HUMAN AND SOCIAL CAPITAL • Human Capital • Social Capital • Strategic HRM gets the right people, competencies, and connections into the right places at the right time © McGraw Hill WHAT IS THE BEST APPROACH TO STRATEGIC HUMAN RESOURCE MANAGEMENT? Talent Management • Attitudes—Workers singled out as “stars” experience increased job satisfaction, engagement, and commitment to the organization. • Behaviors—Employees identified as high-potential respond with greater effort, better job performance, and lower turnover. • Cognitions—Workers respond to their organizations’ elevated perceptions with higher self-efficacy and increased feelings of fulfillment. High Performance Work Systems © McGraw Hill RECRUITMENT AND SELECTION: PUTTING THE RIGHT PEOPLE INTO THE RIGHT JOBS Recruitment: How to Attract Qualified Applicants Selection: How to Choose the Best Person for the Job © McGraw Hill RECRUITMENT: HOW TO ATTRACT QUALIFIED APPLICANTS • • • • • Internal Recruiting: Hiring from the Inside External Recruiting Hybrid Approaches: Referrals and Boomerangs Which Recruitment Approach Is Best? How Fit Figures into Recruitment © McGraw Hill SELECTION: HOW TO CHOOSE THE BEST PERSON FOR THE JOB Selection is the process of screening job applicants and choosing the best candidate for a position. • What Are Legally Defensible Selection Tools? • Background Information: Application Forms, Résumés, and Background Checks • Interviews: Unstructured, Situational, and BehavioralDescription • Employment Tests: Ability, Performance, Personality, Integrity, and Others © McGraw Hill MANAGING AN EFFECTIVE WORKFORCE: COMPENSATION AND BENEFITS Wages or Salaries Incentives Benefits © McGraw Hill ONBOARDING AND LEARNING AND DEVELOPMENT • Onboarding: Helping Newcomers Learn the Ropes • Learning and Development: Helping People Perform Better © McGraw Hill ONBOARDING: HELPING NEWCOMERS LEARN THE ROPES • Effective onboarding programs generate a host of benefits. • Onboarding Best Practices POSITIVE ONBOARDING EXPERIENCES GENERATE: NEGATIVE ONBOARDING EXPERIENCES GENERATE: Increased commitment, job satisfaction, and productivity Decreased productivity and job satisfaction Higher customer satisfaction Lower customer satisfaction Lower turnover Higher costs and turnover TABLE 9.1 The Effects of Positive and Negative Onboarding Experiences. Source: Findings based on C. Caldwell and R. Peters, “New Employee Onboarding—Psychological Contracts and Ethical Perspectives,” Journal of Management Development, 2018, pp. 27-39. Access alternative text for slide images. © McGraw Hill LEARNING AND DEVELOPMENT: HELPING PEOPLE PERFORM BETTER • The Learning and Development Process • Different Types of Learning and Development • Learning and Development Is Worth the Investment Access alternate text for slide image. © McGraw Hill PERFORMANCE MANAGEMENT Performance Management in Human Resources Performance Appraisals: Are They Worthwhile? Two Kinds of Performance Appraisal: Objective and Subjective Who Should Make Performance Appraisals? Effective Performance Feedback © McGraw Hill PERFORMANCE MANAGEMENT IN HUMAN RESOURCES Performance management, can improve firm profitability as well as employee performance, productivity, motivation, and attitudes. Figure 9.4: Performance Management: Four steps. Source: Adapted from A. J. Kinicki, K. J. L. Jacobson, S. J. Peterson, and G. E. Prussia, “Development and Validation of the Performance Management Behavior Questionnaire,” Personnel Psychology, 66 (2013), pp. 1–45. Access alternate text for slide images. © McGraw Hill PERFORMANCE APPRAISALS: ARE THEY WORTHWHILE? • A performance appraisal can sometimes consist of a tense conversation that leaves both parties feeling unsatisfied. • Frequent feedback is best. • Feedback should be future-oriented. © McGraw Hill TWO KINDS OF PERFORMANCE APPRAISAL: OBJECTIVE AND SUBJECTIVE Objective Appraisals • • © McGraw Hill They measure desired results. They are harder to challenge legally. Subjective Appraisals • Trait appraisals • Be…
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